Category: profits

My green building and blogging colleague Barry Katz just had a post about James Howard Kunstler on his The Future Is Green Blog. Kunstler is one of the “dystopians” featured in a New Yorker article last week. Kunstler is not sanguine about what the future is going to look like for us and our descendants. He thinks that not only is global warming likely to cause a disaster, but so is the current, or an upcoming, financial meltdown. Barry writes:

In his view, anything short of ending our dependence on cars for personal transportation is a doomed enterprise.

I’ve been skeptical of the “stimulus” as sketched out so far, aimed at refurbishing the infrastructure of Happy Motoring. To me, this is the epitome of a campaign to sustain the unsustainable — since car-dependency is absolutely the last thing we need to shore up and promote.

Could the terrible things he predicts happen? In the New Yorker interview he provides as an example and a warning the famous fall of the Roman Empire – the city of Rome itself went from a population of over one million in 100 AD to less than 50,000 in a little over 400 years. And there certainly have been many other similar collapses in history – even in pre-Columbian North America there were multiple population collapses due to resource overuse (and genocide, but that’s another topic).

The difference today – at least we hope – is that we have some Cassandras – Al Gore, Kunstler, the IPCC, me and Barry Katz, among many others – warning us, and we have the means and opportunity to take the warning. The question is, do we have the will to put the pedal to the metal to address the problems? For me, I see that as doing the following, and doing it much faster than anyone is actually predicting is possible today:

Immediately stop wasting energy – this means getting our houses and commercial buildings more efficient, both new and existing ones; getting more efficient cars on the road

Develop and commercialize technologies for distributed energy storage – effective energy storage is one of the key sticking points for my vision of zero net energy homes and for accelerating the decline of traditional power plants

Figure out a way, or several ways, to get some of the CO2 back out of the atmosphere – reforestation is a start (and can make a significant difference, according to this study)

Finally, make structural changes to the rules and incentives of life so people will work closer to where they live, will be able to take public transit in a reasonable way, choose to build highly efficient homes not because its the right thing to do, but because it’s the law, or there are other concrete benefits, and so that businesses will find it’s profitable to save the world – whether it’s through being more efficient themselves, or by helping the rest of us “do the right thing”

I call this blog “Keeping The Lights On” because I am optimistic that we’ll figure out how to have a decent life without CO2, that we’ll figure out how to keep the oceans from rising too much and losing too many species, and that civilization won’t collapse due to a financial crisis in the meantime. There are a lot of hurdles to be leapt to accomplish this, and many of them will be costly – but that means that someone’s going to make some money on them, so there will be incentives. And that’s the other half of the title – “Profitable Applications” – business can drive this transition, for profit. The big challenge is getting business ramped up fast enough to save our butts – I think it can happen, and even with the economy in its current sad state, we’re still seeing hopeful signs.

Well, that’s a couple of pages full of assertion and conjecture – I’d love to hear your thinking on this.

Under the California Global Warming Solutions Act of 2006, the state must impose a limit on the amount of pollutants companies emit and expand renewable energy. These changes, along with others, would result in 100,000 new jobs, boost the state economy by $27 billion and increase personal income by $14 billion, the study said.

It’s traditional to believe that becoming green – reducing energy usage, switching to renewable energy, and curbing greenhouse gas emissions – is costly and a net drag on economies. But studies like this one, as well as many others (see the Rocky Mountain Institute website for many more examples), show again that the future is going to be both green and profitable.

This is a great example that aligns perfectly with the topic of this blog, “Keeping the lights on.”

In its most recent “Environmental Lovins” blog post, Monica Sanford and Maria Stamas of the Rocky Mountain Institute describe “passive design,” the techniques for building structures that work for humans within the natural constraints of the environment. Buildings sited for optimal use of daylight, equipped with thermal mass to keep them cool in summer and warm in winter, using passive ventilation systems, and so on, can use significantly less energy than “normal” buildings.

Consider the Anasazi Indians. They constructed high-mass adobe dwellings in southern-facing caves in the American West. In the winter, when the sun follows a lower path, their designs harnessed the sun’s direct heating energy, and during the summer, when the sun follows a higher path, rock overhangs blocked heat gain and the sun’s harsh rays.

Though they didn’t realize it at the time, the Anasazi employed passive design — using the sun’s energy to light, cool, heat and ventilate a building’s interior.

Sanford and Stamas go on to provide a lot more background on passive design and its benefits for building owners, occupants, and the global environment.

As an example of the power of passive design, especially when combined with renewable energy sources, they pointed out this office building under construction in a suburb of Paris which will create more energy than it uses.

Patrick Getreide, who is leading the Energy Plus project with partner Marc Eisenberg, said: “It will be the first building in the world to be ‘energy plus’ and carbon zero.”The proposed building, which will be more than 70,000 sq m and house up to 5,000 people, will produce enough of its own electricity to power all the heating, lighting, and air conditioning required by tenants. It will also generate carbon credits which it hopes to trade for money in the future.

Energy Plus building visualization

Getreide acknowledges that this isn’t the cheapest way to build a building (yet), but anticipate that tenants will end up paying about the normal rate for premium office space in their location. And of course, they won’t have energy bills.

By using integrated design, including solar PV collection, optimal siting, and a cutting-edge form of insulation, the team expects electricity consumption per square metre of office space per year of 16 kilowatts, lower than any other building in the world of this size. Most modern buildings use between 80 and 250 kilowatts per square metre, while older ones often use up to 300 kilowatts.

Because commercial real estate is a conservative industry, this project required investment from non-traditional sources, including former President Clinton’s Global Initiative and support from several governments. Rocky Mountain Institute is a key advisor on the project as well.

In a recent survey by Eye For Transport, supply chain executives across a range of industries agreed not only that “greening” the manufacturing process was becoming more and more cost effective, but that they expected increased profits and better quality as a result.

A whopping 95% of the 3,000 North American executives polled agree that green manufacturing will continue to expand, citing increased profits (66%) and improved efficiency and product quality (43%) as key drivers.

43% is not even a majority, but it’s a sign the tide of perception is turning that going green is not a tax, but can result in both bottom line and top line benefits to companies.

Every day I get emails about “clean tech financing this” and “clean tech financing that” – last year there was over $7 billion in investments in clean technologies in the U.S. In this interview in the San Jose Merc, Paul Holland of Foundation Capital describes some of his philosophy on clean tech investment, including a strong focus on technologies that will reduce energy demand:

“The first lesson is there’s nothing wrong with a capital-efficient investment, even in clean tech. The second lesson is, look what happens when you don’t pay attention to the first lesson.”

Foundation has just closed a new $750 million fund, $250 million of which will be focused on clean tech, primarily on the demand side, although they are making some investments in supply as well – solar and biofuels.

Holland is also building a new, extremely energy efficient home in Portola Valley, CA. One of his goals for the building is to make much of the design reusable for other new homes.

“Once you get over the custom elements, it can be reproduced if you want to go down that road.”

Artist's conception - Manhattan covered with solar cells. If Walmart covers all its roofs with solar cells, they'll cover an area equal to Manhattan

The New York Times has a story today about the big box stores rushing to get solar cells on their roofs before a Federal tax break expires at the end of December. The article’s analysis is that they are primarily doing it for PR purposes, since PV-based energy is still a lot more expensive than conventional. The benefits of being able to say they are green are compelling. But the companies put a slightly different spin on it:

But retailers believe that they can achieve economies of scale. With coal and electricity prices rising, they are also betting that solar power will become more competitive, especially if new policies addressing global warming limit the emissions from coal plants.

Retailers, hoping to create a bigger market and positioning themselves at the forefront of a national shift toward renewable energy, are encouraging one another to join the bandwagon.

Thomas Friedman’s OpEd on Sunday describes how Denmark has achieved energy independence, and illustrates the numerous benefits for the country, including a very low unemployment rate and a large new export market.

When the 1973 oil shock hit, Denmark got 99 percent of its energy from the Middle East. Now they get zero. The country has combined massive energy efficiency programs, such as using waste heat from power plants to heat homes (known as “cogeneration”), with alternative energy sources like windmills (20% of their energy comes from the wind now), effective use of their own petroleum resources in the North Sea, and incentives for lowering energy use via high taxes on gasoline.

As a result, Danes enjoy one of the highest standards of living in the world, an extremely low unemployment rate, and a healthy export sector in alternative energy products.

Because it was smart taxes and incentives that spurred Danish energy companies to innovate, Ditlev Engel, the president of Vestas — Denmark’s and the world’s biggest wind turbine company — told me that he simply can’t understand how the U.S. Congress could have just failed to extend the production tax credits for wind development in America.

Engel suggests why this might concern us here in the United States.

“We’ve had 35 new competitors coming out of China in the last 18 months, and not one out of the U.S.”

If Denmark has been able to achieve 100% energy independence, at net benefit to their society economically, what does that say about America’s chances? Denmark has some advantages – it’s much smaller than the U.S., it has new oilfields in the North Sea – but we have advantages as well – our Southwest is much better for solar than anywhere in Denmark, we have whole states available for wind power, we have comparatively high rates of energy inefficiency that represent massive “negawatts.” Amory Lovins of Rocky Mountain Institute has outlined a set of steps for getting the U.S. off oil by 2025 – Winning The Oil End Game – that provides one possible, well-researched scenario for a profitable transition.

In the 35 years since the ’73 oil shock, Denmark has accomplished something remarkable. Now we in the U.S. need to set ourselves a similar goal. Using new technologies, such as the fuel cell breakthroughs I mentioned last week (here and here), we should be able to get there a lot faster than 35 years.

A report from Worldwatch Institute details the way that traditional high carbon industries, such as coal, are shedding jobs while renewable energy and energy efficiency industries are adding jobs.

An estimated 2.3 million people worldwide currently work either directly in renewables or indirectly in supplier industries. The solar thermal industry employs at least 624,000 people, the wind power industry 300,000, and the solar PV industry 170,000. More than 1 million people work in the biomass and biofuels sector, while small-scale hydropower employs 39,000 individuals and geothermal employs 25,000.

It’s not just those people and organizations applying clean and renewable energy who are profiting, but also those doing the work.